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It was through its initiatives that the establishment of supporting institutions like the Islamic Financial Services Board (IFSB), International Islamic Financial Market (IIFM), the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and the International Islamic Liquidity Management (IILM) was successfully arranged. The latest Ten-Year Framework and Strategies tries to consolidate all the efforts into a well-developed program.

Current global Islamic financial industry development Distinguished Guests, Ladies and Gentlemen, 6. The global economy is still trying to regain its momentum for the economic development in the last 5 years. The economic recovery is surrounded by uncertainty which could easily affected by economic policies of advanced economies and other disturbances.

Role of the Bank of Japan in payment and settlement systems The Bank of Japan plays a multi-faceted role in Japan’s economy. It is responsible for monetary policy and, at the same time, as a bank for banks, it provides banking services and maintains the stability in the settlement of funds and securities in Japan.

Given this fresh experience, and my earlier remarks, I would assess the costs of providing tax incentives for leverage to be higher today than such an assessment in, say, 2006. With that in mind, I believe that my analysis suggests two changes in the tax code.

The overnight index swaps (OIS) based on overnight MIBOR has been the most widely used OTC derivative for hedging interest rate risk. The market participation, however, remains much skewed with the foreign banks as the major player.

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This convergence has rarely existed within the triad over a relatively lengthy period of time. At the moment, the structural differences between America, Japan and continental Europe are becoming more evident. – Or, the countries are otherwise willing to change parities quickly, as unobtrusively as possible and in a forward-looking manner.

However, experience has shown that such systems tend to be “too little, too late”. 1 BIS Review 8/2000 – A third possibility is to subordinate other internal economic policy targets almost completely to the exchange rate.

The emphasis on improved data standards in the revised Accord should not be interpreted solely as a regulatory capital requirement, but rather as a foundation for risk-management practices that will strengthen the value of the banking franchise. Even the best processes for evaluating risk and performance suffer if the data used are flawed.

In this broader sense, "data integrity" can refer not only to the consistency, accuracy, and appropriateness of the information in the database and model, but also to the processes that produce and use this information. Used this way, "data integrity" includes quality of credit files, tracking of key customer characteristics, internal processes and controls, and even the training that supports them all.

It helps customers to better understand and manage financial risk and deal with complexities of the market place place and take advantage of increased competition and choice in the financial sector. The RBI, on its part, intends to advance the cause of financial education in the country as part of an overall strategy.

It is also the case that communication strategies of central banks differ widely, implying that there is no single blueprint for central bank communication. In many cases, the nature of the communication is determined by the institutional environment.

Although it might seem appealing, this initiative faces a lack of credibility on future fiscal adjustment because today’s authorities do not want to deal with the costs associated with any current austerity measures. In fact, the fiscal adjustment needed to begin stabilizing the public debt would probably have a negative impact on such economies in the short term.

The reform process in Turkey is of a different kind, but in scope it is comparable to the transformation of the east European countries. Personally, I have the hope that the mere prospect of Turkey’s joining the EU will contribute to a peaceful political stabilisation of the Middle East. The awful terrorist attacks have shown that this is urgently needed. 4.

Obviously it is not costless to deliver these things, and so a coordinated decision process would need to have some way of taking into account both the costs and benefits, including benefits to end-users, in order to determine whether an investment is worth making.

I firmly believe that central banks should be as transparent as possible, both for reasons of democratic accountability and because many of our policies are likely to be more effective if they are well understood by the markets and the public.

The fact that we were unable to distribute the entire annual profit this year is due to the Bundesbank, like many enterprises, preparing its balance sheets in accordance with the German Commercial Code (Handelsgesetzbuch). Last year, the Commercial Code provisions on the discounting of post-employment benefit obligations were amended.

On another matter, over the past few months there has been quite a lot of interest in the regular special papers considered by the Board. This followed the release of the minutes of the July meeting, which recorded that the Board had held a discussion of the neutral interest rate (that is, the rate at which monetary policy is neither expansionary nor contractionary).

That trend has raised BIS Review 68/1997 -2- public policy questions regarding bank powers and the appropriate organizational structure through which banking organizations should gain new powers. Proposals recently introduced in Congress to address those issues would fundamentally redefine the relationship of banks to other financial services companies and in some instances their relationship to commercial firms as well.

Banks have not only expanded their products and activities, but have also expanded their geographic reach, both domestically and globally. Within the United States, banks have expanded nationwide as barriers to interstate banking have been removed. This expansion should continue as banks exercise their new power to branch across state lines. A related domestic trend is the rapid consolidation within and between banking organizations.

The third, and broadest, concept is an ‘Enabling Social and Political Environment’ and includes institutions that can help to shape political, social and economic outcomes. Institutions, such as central banks, can provide a forum for the State, Civil Society and the corporate sector, to come together in order to identify and pursue common goals.

The key point I make in this speech is that trust and credibility are key to institutions being effective in this role. [6] See Honohan (2009) for an overview of the factors that contributed to the banking crisis, including regulatory failures. [7] Partha Dasgupta (2005), “The Economics of Social Capital”, Economic Record, 81(s1).

5 Eric Klinenberg (2013), “Adaptation: How Can Cities Be ‘Climate-Proofed’?” New Yorker, January 7.

We now know that governance deficiencies were not confined to Asia, and that some countries that were pointing the finger had governance deficiencies closer to home to worry about. The infatuation with the “new economy” also resulted in a bubble, the bursting of which has been exerting a dampening influence on world economic growth for the past three years.

Because of sovereign risk, money is also safe with one - two aberrations. On the negative side: (a) there is separation of ‘Ownership’ and ‘Management’, but no checks and balances.

CEO as well as the Board is appointed by the owner, i.e Government (b) Very little accountability to the Board as Board cannot remove the Chairman; (c) Substantial limitations on management as staff issues are outside the purview of management; (d) Weak on internal auditing and risk management.

Indeed, ASEAN financial integration does not treat integration as a matter of liberalisation, but provides focus on stability and inclusion as its equally important pillars. The three pillars of financial integration, financial inclusion and financial stability ensure that the strength, resilience and inclusiveness of the benefits of regional integration in the financial sector are pursued and subsequently achieved. 17.

Such “semi-public” issuance helps to address the problem of information asymmetries associated with new financial products. However, the public sector can also support the development of green finance in its role as investor. In the German public sector, sustainable investment recently gained momentum, especially for equity investments.

Eighty-six per cent of central banks are exploring CBDCs and many countries have already undertaken operational tests, developed proof of concepts, or run trials.14 Private players have also developed sophisticated products for differing interests.

Foreign exchange (FX) regulations are being overhauled to achieve more efficiency and ease of doing business. The BSP will soon release an exposure draft on the liberalized rules on FX loans and offshore loans of the private sector. This will re-focus the registration process to primarily data-gathering and minimize documentary requirements.

9.2); • to the extent deemed possible and appropriate, the ECB shall have recourse to the NCBs to carry out operations which form part of the tasks of the ESCB [Eurosystem] (Article 12.1) From these Articles it is clear that in the system of currently sixteen component parts the ECB has a special position: it is the “captain of the team”.

2 How to learn from the current crisis and manage future challenges In such dynamic times, I think it is important to pause briefly and take a moment to look back and reflect. Much has changed since last year’s conference.

And second, it is likely to be destabilizing as agencies try to conform to market perceptions. • In contrast, in Latin America we like to think that internal rating systems are a more sensible basis for a BIS system.

I should also mention that a number of countries in the region have successful public credit bureaus that should also be taken into consideration as a possible standard to be used in setting requirements.

My view is supported by current developments, in particular the failure of some countries to step up such reforms. However, I must add that I am extremely happy with the efforts made by the governments of some Member States to seriously embark on effective structural policies aimed at economic reform.

Mr. President, I sincerely hope - both in my capacity as President of the ECB and as a European citizen and staunch supporter of European integration - that the introduction of the euro will act as a catalyst for increased co-ordination in the area of structural policies. And, as I already mentioned, I hope the euro will also perform this function in other areas.

We need to engage with our fellow citizens and enter into dialogue with them. We need to explain to them – also through you – what the ECB does and that we are committed to doing its work effectively. We should bear in mind that three-quarters of euro area citizens are in favour of the euro. Your mandate is to ensure price stability.

Is this the main issue today? Doesn’t asking the question imply an assumption that price stability has been maintained? I would take that to be a compliment for the ECB. Indeed, since the introduction of the euro, annual inflation has averaged around 1.7% in the euro area.

In this respect the question of the international representation of the Eurosystem is relevant for the international role of the euro. The Eurosystem as a new regime of global importance in the field of monetary and foreign exchange policy has to be represented externally in an appropriate manner and have commensurate representation in international bodies.

At its meeting in December 1998 in Vienna, the European Council agreed on the principles for the external representation of the Community in Stage 3 of EMU in international fora such as the G7 and the IMF by endorsing the Report of the Ecofin Council on this issue.

2 BIS Review 165/2009 Table 1: Key macroeconomic indicators – India Indicators 2008–09: Q1–Q4 2009–10: Q1–Q2 Real GDP Growth (Y-o-Y) (%) Industry Services Q1 7.8 5.1 10.0 Q2 7.7 4.8 9.8 Q3 5.8 1.6 9.5 Q4 5.8 –0.5 8.4 Q1 6.1 4.2 7.7 Q2 – – – Inflation (Y-o-Y) (%) WPI CPI-Industrial Workers 12.0 7.7 12.1 9.8 5.9 9.7 0.8 8.0 –1.1 9.3 –0.2 11.8 Money and Credit Growth (Y-o-Y) (%) Broad Money (M3) Banks Credit 21.5 24.5 19.5 23.5 19.9 22.7 18.6 16.4 20.2 15.1 19.7 14.1 Interest Rates (%) Overnight (call) money 10-year g-sec 6.8 8.4 9.5 8.5 7.8 5.9 4.2 6.6 3.2 6.8 3.2 7.1 37.6 31.6 39.5 60.5 –15.0 2.1 –22.3 –29.1 –30.0 –35.0 –21.0 –33.6 –31.4 –9.0 11.1 312.1 –38.7 –12.5 7.6 286.3 –34.7 –13.0 –4.3 256.0 –14.6 4.7 –5.3 252.0 –26.0 –5.8 6.7 265.1 – – – 281.3 Foreign Trade Export Growth (%) Import Growth (%) Balance of Payments (US $ billion) Trade Deficit (–) Current Account Deficit (–) Net Capital Flows Reserve Outstanding Table 2: Components of aggregate demand in India (Per cent) Item 2008–09 2009–10 Q1 Q2 Q3 Q4 Q1 Growth Rates (Year-on-Year) Private Final Consumption Expenditure Government Final Consumption Expenditure Gross Fixed Capital Formation Change in Stocks Exports Less Imports 4.5 –0.2 9.2 6.0 25.6 27.4 2.1 2.2 12.5 5.6 24.3 35.3 2.3 56.6 5.1 1.4 7.1 21.7 2.7 21.5 6.4 –0.9 –0.8 –5.7 1.6 10.2 4.2 3.2 –10.9 –21.2 Relative shares Private Final Consumption Expenditure Government Final Consumption Expenditure Gross Fixed Capital Formation Change in Stocks 58.0 9.6 32.2 3.2 55.5 8.3 34.5 3.2 57.4 12.5 30.9 2.9 51.4 13.4 31.6 2.9 55.6 9.9 31.6 3.1 Net Exports –1.3 –10.5 –8.5 –2.9 1.6 Source: Central Statistical Organisation.

BIS Review 165/2009 3 Why was India impacted by the global financial crisis? 9. During the initial phases of the global crisis, the Indian financial markets remained unaffected as the direct exposure of banks to global subprime assets was negligible. The growth process being largely domestic demand driven remained broadly intact.

The PFMI lays out comprehensive expectations for CCPs and other financial market infrastructures. Recent Accomplishments Extensive work has been done to implement the PFMI.

The BC model allows banks to provide door step delivery of services especially cash in – cash out transactions at a location much closer to the population, thus addressing the last mile problem. 16.

To keep inflation on target, we try to keep the economy operating near its full capacity. When the demand for goods and services pushes the Canadian economy against the limits of its capacity, and inflation is poised to rise above target, the Bank will raise interest rates to cool off the economy.

And when the economy is expected to operate below its production capacity, and inflation is poised to fall below target, the Bank will lower interest rates to stimulate growth. We also factor in shocks that directly affect inflation. Because we target domestic inflation, we have a floating currency.

2 BIS Review 120/2007 euro area, where regional monetary and exchange rate policies are options that are no longer available, it is important to make sure that other shock adjustment mechanisms function properly.

Such mechanisms are needed in order to prevent a country or region from entering into a period of protracted low growth and higher unemployment, or into a long period of overheating, after experiencing a country-specific shock. Allow me, now, to elaborate on four main features of economic and financial integration in Europe, namely trade, financial integration, labour mobility and business cycle synchronisation.

3 the highest rate of increase in productivity among major countries from 2012 to 2016, with an annual rate of 1.2 percent. Japan's average for the 10 years prior to this was 0.8 percent; therefore, Japan's productivity rose even after the introduction of QQE.

Moreover, the capital-labor ratio per worker has declined.2 This means that productivity would have risen even further if there had been sufficient investment.

And even for those of us with the more conventional job descriptions, the nature of our daily work and its relationship to the economy and society is, I am sure, very different from what we might have guessed in 1975. My point is only that you cannot predict your path.

You can only try to be as prepared as possible for the opportunities, as well as the disappointments, that will come your way. For people, as for economies, adaptability and flexibility count for a great deal.

Not surprisingly, because striking the right balance takes time, genuine innovation in payment systems over history has often been measured in decades, not years. Private Digital Currencies As part of the new technology associated with fintech, we are now seeing the emergence of privately developed digital currencies using new decentralized technologies.

Fundamental to these digital currencies is the establishment of a new asset, the unit of the digital currency—for example, a bitcoin—and a new record-keeping and transfer mechanism that enables users to store and trade those units—for example, a blockchain—often without reliance on traditional financial institutions.

(Pause, the governor takes the tube in his hands) According to the procedure for disclosing classified information, I have to open this tube and show you an uncut sheet of the new banknotes.

I am happy that Slovenia has managed to fulfill all these requirements and thus will join the euro area in January, 2007, as the first country among the new EU Member States. This will enable Slovenia, to reap all the benefits of the single currency. Against the background of its stability architecture, Europe has no reason to fear the effects of globalization.

It means rather that in order to make the best out of them one needs to remember that models are by necessity “local” approximations to very complex phenomena and they should be used with sound practical judgment as a framework, not a straightjacket, for our decision-making.

The ball is currently in the Commission’s court. A lot of disappointment has been expressed that some of the issues that were heavily debated in ESMA – and where we believe sensible proposals were reached – have been revisited and changed. I can understand that sense of frustration.

As was indicated by the fact that the time frame of about two years was initially assumed, I at least did not expect that this measure would be continued for a very long time. Therefore, I have had mixed feelings about the expansion of QQE in October 2014 and the introduction of a negative interest rate in January this year.

I voted against both of these measures. As for the reason for my opposition to a negative interest rate in particular, I believe that the expansion of the monetary base and the introduction of a negative interest rate are essentially contradictory and their combination lacks sustainability.

In the case of checks, for example, this infrastructure includes offices, equipment, and staff for rapidly processing, shipping, and presenting checks throughout the country, literally overnight. The foundation of much of the current payments system infrastructure was laid in the 1960s.

I would like to look back on the experiences of the past 10 years, what the FSB has accomplished, and also offer some perspective on just how it contributed to the construction of the post-crisis global financial architecture. As you would expect, I believe the FSB has and will continue to play an important role in our global financial system.

Source: For U.S. bank holding companies: FR Y-9C; for foreign banks: FR Y-9C, FFIEC 002, FR 2886b, FFIEC 031/041, FR Y-7N/NS, X-17A-5 Part II, and X-17A-5 Part IIA, and X-17A-5 Part II CSE. 8 Source: FR Y-9C, FFIEC 002, FR 2886b, FFIEC 031/041, FR Y-7N/NS, X-17A-5 Part II, and X-17A-5 Part IIA, and X-17A-5 Part II CSE.

9 Source: FFIEC 002, various years. 10 Ben S. Bernanke, Carol Bertaut, Laurie Pounder DeMarco, and Steven Kamin (2011), “International Capital Flows and the Returns to Safe Assets in the United States, 2003–2007,” International Finance Discussion Papers Number 1014 (Washington: Board of Governors of the Federal Reserve System, February).

This deterred consumption, increased prudent savings and affected consumer confidence. It is encouraging news that Liaoning Province initiated the pilot programme on social security system reform. The intensity of the reform is probably not enough and more in-depth research is needed. The second constraint is the demographic structure. China will gradually move to an ageing society.

The social security system is still largely built on a pay-as-you-go basis, which effectively makes the young generation save more to account for the surging claims on the pension system. Under these circumstances, efforts to encourage consumer credit need to look at the inter-generation consumption behavior.

In some cases, supervisors’ perspectives will differ from those of bank management, and supervisors clearly face different incentives from bank management. Where they reach different judgements they need to be prepared to use their discretionary supervisory tools to buttress the rules that are in place. In the end, ensuring financial stability requires as much attention to supervision as it does to regulation.

BIS central bankers’ speeches 3 It is important to point out that in this regard the Australian Prudential Regulation Authority (APRA) has done a better job than many prudential authorities elsewhere. It has been able to combine a sensible approach to rule-making with a focus on the big picture.

Plans recently put forward by the President’s National Commission on Fiscal Responsibility and Reform and other prominent groups provide useful starting points for a much-needed national conversation. Although these proposals differ on many details, they demonstrate that realistic solutions to our fiscal problems are available.

Intensive preparations are under way in close cooperation with the national supervisors in order to have the SSM fully operational in November 2014. As an essential part of that work, we will conduct – together with European Banking Authority – a comprehensive assessment of banks’ balance sheets to create greater transparency in respect of the risks.

While we have benefited from having well-anchored inflation expectations in the past, this mooring will be tested by the very rough economic waters caused by the pandemic. Our extraordinary policy actions have been firmly focused on attaining our inflation target, by supporting demand and employment throughout this difficult and protracted economic recovery.

Through our words—and more importantly, through our actions—we remain steadfast in our commitment to helping restore the Canadian economy and the economic and financial welfare of all Canadians.

Electricity supply during this past summer, which was a cause of great concern, turned out not to impose considerable constraints on the economy, not only because this summer was cooler than the extremely hot summer last year, but also because of efforts by firms and households to save electricity.

Rasheed Mohammed Al Maraj: Challenges for Islamic finance Keynote address by His Excellency Rasheed Mohammed Al Maraj, Governor of the Central Bank of Bahrain, at the World Islamic Banking European Summit, London, 8 July 2008. * * * Your Excellencies, Ladies and Gentlemen: Good Morning.

The policy orientation of the Reserve Bank, simply put, is to ensure and promote inclusive growth without adversely impacting the equilibrium of financial stability. Reserve Bank remains supportive of initiatives of the stakeholders as long as the programmes of affordable houses for all do not lead to structural damages to the financial eco-system.

Along with the Government, SEBI, Reserve Bank’ s endeavors have been to develop a deep and vibrant debt market including for mortgage securities in a calibrated manner so as to ease financing pressures on the banks and also to provide an alternate avenue for raising long term resources. Reserve Bank has permitted investments by banks in mortgage backed securities subject to certain conditions.

But there is absolutely no evidence that I am aware of that monetary policy is able to foster a higher rate of real economic growth in the long-term except by delivering predictably stable prices, or that monetary policy is able to have any sustainable effect on the real exchange rate.

The Ripe Groundwork for Greater Nation-Building When I first assumed the Governorship of the Bangko Sentral in July of last year, I knew I had inherited a strong economy and a dedicated institution committed to sound macroeconomic management and prudent financial supervision. I knew that my task was not to rebuild, but to build on already strong and built foundations.

Make sure that all loans are adequately and legally backed by valid securities - whether the loans are made to co-operative societies or to individuals. When a bank lends few thousands of rupees it is the borrowers’ headache to repay the loan; when it lends millions of rupees it is not the borrowers’ headache but the bankers’ headache to recover the money lent out.

In addition, as globalisation overtakes regionalism, we have also to simultaneously compete with the entry of companies from third countries outside the region in the provision of services. The technology permits it and it will be very difficult to exclude them. We ignore them at our peril.

That the Federal Reserve is holding a portfolio of long-term assets on its books is not especially unusual – prior to the onset of the financial crisis, we held about $ billion of Treasury securities with maturities of more than five years. Moreover, we have long been authorized to purchase securities issued by government-sponsored enterprises (GSEs).

I suggest that we make a shared commitment to reduce the volume of deferred-amortisation loans and adjustable-rate loans with very frequent refinancing – and especially loans 4 BIS central bankers’ speeches combining the two – within a few years. And we should also seek to spread refinancing of the remaining short-term bonds evenly over at least three annual dates.

For example, the markets for agricultural commodities in the United States reaped some of these benefits when standardized futures contracts for wheat and other commodities were introduced in the middle of the nineteenth century. 5 Historically, the secondary markets for corporate bonds, loans, and asset-backed securities were illiquid and not transparent.

Liquidity in these [msg1] markets has improved over time but is still quite poor. For example, half of outstanding corporate bonds did not even trade once in the first three months of 2006. 6 Individual bonds tend to be somewhat liquid immediately after they are issued, but trading activity declines quickly thereafter as investors put the bonds into buy-and-hold portfolios.

Stress testing of banks’ balance sheets In the spring of last year, the stress tests at the major US banks revealed, under the responsibility of the prudential authorities that had conducted them, the scale of the risks of individual banks, above all those in connection with the “toxic” assets on their balance sheets.

This transparency drive was amply repaid by the markets: these banks, several of which had been assisted initially by public money, succeeded in raising over $ billion in private capital, an unthinkable figure prior to the publication of the test results. Stock exchange assessments and fund-raising also benefited from the release of the results.

It is interesting to note that the highest scores are on trade integration while the lowest scores are on financial and macroeconomic integration.

The African Central Bank (ACB)11, one of the three financial institutions of the African Union, is due to be set up by 2028, after the achievement of certain milestones, including the establishment of an African Common Market as well as an Economic and Monetary Union that would include Continental Fiscal and Banking Unions.

After reading what the Government spokesman said on Monday I am pleased to see that there is no disagreement between the Governor and the Government and that the issue is abating. 2 BIS central bankers’ speeches

5 The Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth, released in January 2013, stated, “The Bank recognizes that the inflation rate consistent with price stability on a sustainable basis will rise as efforts by a wide range of entities toward strengthening competitiveness and growth potential of Japan’s economy make progress.” Based on this recognition, the Bank set the 2 percent target.

Policy was implemented during this period by estimating the total reserve growth necessary to meet the money-growth target and by holding to the associated path for nonborrowed reserves. In the process, the federal funds rate was free to move to whatever level would be consistent with the money-growth objective over time.

Accurately measuring the effect of trading on prices, perhaps the most fundamental gauge of market liquidity, can be quite difficult in such an environment.7 There are also differences between on-the-run Treasury securities, the securities that were most recently issued and that are the most liquid, and offthe-run Treasury securities.

Global financial conditions have eased and market sentiment has improved as a result. This has helped boost the prices of oil and other commodities so far this year. And it’s one of the reasons why our April MPR called for a firming in the global expansion later this year. The wild card, of course, is the trade war.

How costly are trade wars for the global economy? In April, we said tariffs over the past two years and trade policy uncertainty would chop 0.4 per cent from global GDP by the end of 2021—that’s about $ billion. While this can only be a rough estimate, we know it matters more for trade-dependent economies like Canada’s.

Another 2 BIS Review 13/2004 connection is that the Deputy Governor of the BOK serves as an ex-officio member of the FSC. Consequently, he takes part in the decision-making process concerning financial supervisory policy. To perform these tasks efficiently, the BOK established a Banking Institutions Department, which currently comprises a staff of 57.

The MOFE has the right to present draft bills relating to finance and supervision to the National Assembly. It is, however, required to consult with the FSC before proposing or revising such legislation. The KDIC, meanwhile, has the right to investigate the business status and assets of financial institutions thought to be in danger of failure.

To reconcile the theory with this fact one would have to interpret the official reserve build-up by China and others as being conducted on behalf of private agents. In all these approaches the roots of the current account imbalances lie outside the United States.

They foresee annual HICP inflation at 0.7% in 2014, 1.1% in 2015 and 1.4% in 2016. In the last quarter of 2016, annual HICP inflation is projected to be 1.5%. In comparison with the March 2014 ECB staff macroeconomic projections, the projections for inflation for 2014, 2015 and 2016 have been revised downwards.

The Danish economy is growing strongly, interest rates remain low, unemployment is falling, and disposable incomes are increasing. At the same time, the introduction of new loan types, e.g. deferred-amortisation, has helped to sustain price increases. The freezing of property taxes has also affected prices. Lending growth is high in Denmark.

SLIDE 11 shows the lending growth of big banks, medium sized banks and small banks. Growth in lending to households accounts for almost half of total lending growth, and 60 per cent of the household element stems from lending for home-financing purposes. On top of that we have seen lending growth of mortgage credit institutions to households of around 10 percent.

This leads me to the question of how monetary policy will evolve once the Governing Council judges that the criteria for a sustained adjustment in the path of inflation have been met. The answer to this question is essentially already indicated in our forward guidance and in the clear sequencing of policy measures that we have communicated.

An adequate domestic clearing capacity helps to preserve financial stability within the EU and to ensure the smooth functioning of euro area markets. Given the economic benefits of global liquidity pools, implementing the active account will require a carefully calibrated and phased approach. We understand the concerns raised.

Indeed, recent wage gains have been strongest for lower-paid workers. People who live and work in low- and middle-income communities tell us that many who have struggled to find work are now getting opportunities to add new and better chapters to their lives.

Probably almost enough has by now been said about poor loan appraisal practices and the consequences of the bubble mentality, but of course that would not have added up to anything of great consequence had it not been for the access, through the globalized banking system, to vast sums that could be borrowed from abroad.

If there are disruptions to trading and communications infrastructure, ad hoc solutions may be needed in order to allow smooth process of necessary transactions and maintaining critical operations. In this context, I would like to cite some instances in our country where the central bank, other regulatory authorities and government have jointly handled the contingencies successfully.

Su Ning: China’s inter-bank payment and clearing service Address by Mr Su Ning, Deputy Governor of the People’s Bank of China, at the press conference on the launch of the Electronic Commercial Draft System, Beijing, 28 October 2009. * * * Dear guests, Friends from the media, Ladies and gentlemen, Good morning.

This meant we had a high inflation rate relative to other countries. We found that about three-quarters of other countries had lower inflation. In addition, with ‘normal’ inflation already near 6%, every new adverse price shock would push us outside of the target range. This would force us to act, rather than be flexible, or would cost us credibility, ensuring a higher inflation rate.

To make matters worse: because everyone was used to inflation around 6%, indexation had set in – prices and wages across the economy were locked in to grow at this pace. This left us in a trap: nominal interest rates had to be high because inflation expectations were anchored at around 6% but high interest rates meant there was always pressure to cut.

More capital market culture in old-age provision Another area where Europe could go further is in promoting a capital market culture for retail investors, particularly when it comes to old-age provision.

As Minister Flaherty has written to his G-20 colleagues, Canada’s view is that it is essential that any option respect the following principles for a robust resolution regime:  Proper allocation of losses to reduce moral hazard and protect taxpayers;  Certainty and uninterrupted service of critical functions and for insured depositors;  Preservation of franchise value of the firm;  Credibility of regime among financial institution counterparties, ex ante; and,  Effective coordination and cooperation among jurisdictions in the event of a crossborder failure of an institution.

The SBP’s strategy is to work very closely with the banking industry to ensure that Basel II implementation is well planned and formulation of a Steering Committee is already underway under the guidance of SBP. However simply upgrading banking sector will be quite impossible to undertake unless the allied/support entities (e.g. credit rating agencies, IT systems etc) are also developed.

This increase was due to abrupt changes in market participants’ confidence in the Greek government’s will and ability to improve the fiscal balance in the medium to long term, which forms the basis for its capacity to redeem government securities.

Looking ahead, private consumption is likely to increase moderately as the employment and income situation continues to improve steadily. Regarding employee income, the labor share in the aggregate output has been on a declining trend in recent years, being below the long-term average, with corporate profits staying at high levels.

What are common among these institutions are unsustainable business models and poor corporate governance practices which has led to the misapplication of depositors funds and pushed them to the threshold of insolvency with liquidity shortages. And, we have all been witnesses to how customers of these institutions have reacted. These developments are not a reflection of the industry.

I will end with some suggestions regarding basic principles for assessing possible future changes to our system of prudential supervision and regulation. To begin, financial innovation is nothing new, and the rapidity of financial evolution is itself a relative concept -- what is “rapid” must be judged in the context of the degree of development of the economic and banking structure.

Prior to World War II, banks in this country did not make commercial real estate mortgages or auto loans. Prior to the 1960s, securitization, as an alternative to the traditional “buy and hold” strategy of commercial banks, did not exist.

In the government securities market, the drop in turnover in 2004-05 and 2005-06 could be attributed to factors such as “buy and hold” tendency of the participants such as insurance companies, which now hold a substantial portion of government securities, particularly those of longer maturities.

Furthermore, certain regulatory changes introduced in late 2004 allowing banks to hold a larger proportion of their BIS Review 145/2007 11 investment portfolio in the “held to maturity” (HTM) category reduced the proportion of portfolio used for trading, thereby affecting the magnitude of G-sec trading.

The financial crisis has led to a broad rethinking of these issues. Given how costly the financial crash has been, it is not surprising that there is now greater support for the view that central banks have a role to play in preventing asset price bubbles. However, doubts remain whether monetary policy should play the primary role.

No one thinks the climb will be easy, but the best bet is that the worst is over. Now the talk has shifted to the more difficult subject of what the international community can do to prevent, mitigate and manage financial crises in the future. The stakes are high, for industrial and emerging market countries alike.

Under these circumstances, the Federal Reserve intends to normalize the monetary policy at a moderate pace. I would like to watch how the normalization of interest rates plays out in relation to the duration of the expansionary phase. Second, in Europe, there remain various adjustment pressures; in addition, the refugee problem is emerging as a serious challenge.

Thirdly, the safety and efficiency of payments and settlement system, which are crucial to financial stability, will be augmented by assigning the responsibility for their oversight and overall management to the Bank of Korea. All in all, the revised legislation will bring the Korean central banking system much closer to convergence with the global standards demanded by the OECD, IMF and other international organizations.

The original speech, which contains various links to the documents mentioned, can be found on the US Federal Reserve System’s website.

* * * Chairwoman Velázquez, Ranking Member Chabot, and members of the Committee, I am pleased to appear before you on behalf of the Board of Governors of the Federal Reserve System to discuss the availability of credit to small businesses. Small businesses are critical to the health of the U.S. economy.

* * The new regulation of finance Conditions in the financial markets have been improving steadily since last spring. Banks are again raising funds in the private bond and share markets. The risk premium indicators are coming down.

However, neither risk premiums nor funding costs have come back to their 2007 level, and there is no reason to think this will happen any time soon: the market has not forgotten that the crisis was the consequence of its own recklessness. Nor is it desirable that it should happen.

This is a combined a result both of the Basel III reforms agreed in 2010 and of independently improved decision-making at our large banks. But the toobig-to-fail evaluation also finds that the capital surcharges for systemically important banks have contributed to enhanced resilience.

Moreover, banks in advanced economies have built up significant loss-absorbing and recapitalization capacity by issuing instruments that can bear losses in the event of resolution. Supervisors and firms are better equipped to deal with problems that occur. Supervisory oversight of systemically important banks has learned the lessons of the crisis and has added a macroprudential perspective.

Ideally, the result of this increase in choice is lower costs and products that more closely match consumer needs. But some consumers are not prepared to confront this array of choices. They lack the financial knowledge to evaluate the alternatives and to see future consequences.

There has been little or no bond issuance by lower-rated corporations or securitization of consumer loans in recent weeks. To help address the tightness of credit, on November 12 the federal banking agencies issued a joint statement on meeting the needs of creditworthy borrowers.

The large fiscal stimulus packages announced in our major trading partners do not take effect until later in the year, with lags from there until spending responds. In the near term, there will be considerable downward pressure on the domestic downturn already well underway, with weakness in household expenditure, the export sector and activity likely to persist through the year.

Coping at the business and household level In light of this weakness and uncertainty about what the year holds, New Zealand businesses and households are understandably behaving cautiously. They are reducing expenses, increasing savings and otherwise shoring up balance sheets. The availability of governmentguaranteed savings vehicles at relatively attractive interest rates, certainly compared to those elsewhere, is probably encouraging this behaviour.

Some have suggested that the unexpected slowness of the recovery is a justification for the FOMC’s increasing the level of monetary accommodation over the past couple of months. But I disagree with this argument. I’ve just described why the FOMC should respond to improvements in economic conditions and outlook with a reduction in the level of monetary accommodation.

Logically, if the economy recovers much more slowly than expected, then the FOMC should respond by reducing the level of monetary accommodation much more slowly than expected. The FOMC should only increase accommodation if the economy’s performance and outlook, relative to the dual mandate, actually worsens over time.

Progress with structural reforms in product and services markets, by contrast, was markedly slower than in the labour market. Nevertheless, according to the OECD, Greece ranks first in the responsiveness to structural reform recommendations made by the Organisation.

And since wage bargaining in many European countries is multi-annual and inertial, this process will naturally play out over several years. In our latest projections, we expect wages to grow by a further 14% between now and the end of 2025 and to fully recover their pre-pandemic level in real terms.

Suffice to say that for the Canadian data, this work has generally confirmed our faith in our model of inflation, in which inflation depends mainly on the degree of excess demand or excess supply in the economy, and this process operates with a lag. In short, we believe that we understand how Canada’s inflation rate has been evolving.

If we have been surprised in the past, it has been either because of sector-specific shocks, or because economic growth was slower than expected and there was more excess capacity than we previously believed. Indeed, the second issue that preoccupied Governing Council was the degree of excess capacity in the economy.

In the public sector, my list of vulnerabilities would include gaps in the regulatory structure that allowed systemically important firms and markets to escape comprehensive supervision; failures of supervisors to effectively apply some existing authorities; and insufficient attention to threats to the stability of the system as a whole (that is, the lack of a macroprudential focus in regulation and supervision).

Today is a day of strikes in protest against the pension reform which will be presented to the cabinet today. Are you in favour of this pension reform? At the moment I am not in a position to assess the structure of the text.

A number of secret memos were written within the Bank beginning in 1948, reviewing the feasibility and even desirability of his proposal.9 2.2 Monetary policy under a floating exchange rate: 1950 to 1962 In June 1954, Graham Towers, the first Governor of the Bank of Canada, retired after 19 years of service and was replaced by James Coyne, one of the authors of the secret memos.

Like many Canadians at the time, the new Governor had become increasingly concerned about the level of foreign ownership in Canada and was anxious to increase national savings as a means of reducing our dependence on foreign capital inflows.

When they were used, mainly in the 1970s and 1980s, for the most part they failed badly for political economy reasons. But in other parts of the world, notably in East Asia, industrial policies have been more successful, and we should try and learn lessons from this experience.

8 The alternative of laissez-faire economic policies, while it has been successful in many respects in SSA, has also failed in one crucial area. Laissez-faire policies have not brought about anywhere near enough private investment in modern industries to create large scale employment and accelerate the structural transformation of SSA economies.

The Bank somewhat lowered its projections for GDP growth in the April 2016 Outlook for Economic Activity and Prices (Outlook Report) from its projections in the January Outlook Report, due mainly to weaker exports reflecting the slowdown in overseas economies. Overseas economies have continued to grow at a moderate pace, but the pace of growth, especially in emerging economies, has decelerated somewhat.

The Chinese economy, looked at from a somewhat longer-term perspective, is in the process of transitioning from manufacturing sector- and investment-driven growth to service sector- and consumption-driven growth. While this transition in itself is desirable, the Chinese economy in the process has decelerated due to downward pressure from adjustments in excess production capacity in the manufacturing sector.

But as I said earlier, I think one of the most useful outcomes of the work to date is the articulation of a coherent framework with which to consider the question.

That said, I think one of the key areas that requires more work is one which is very much in a state of flux at the moment, namely the implementation of the vast regulatory reform agenda. A holistic view of how the Australian and global financial system is being transformed by this would be very welcome and is much needed.

We have had that debate in Australia. It was settled more than a decade ago, and I do not wish to re-open it. With those preliminaries, let us see what can be said about recent trends. The trade arithmetic is wellknown.

* * * Introduction Thank you for your invitation to speak here today. In my short intervention, I will focus on the question how post-crisis monetary, fiscal and macroprudential policies in Europe should look like.

If we are thinking about changes, I believe we should strengthen those institutional structures that did their job well during the financial market turbulence. For me, this means that, first and foremost, the FSF should continue to play a key role.

These include remittances from overseas Filipinos (OFs), revenues from the IT-BPO industry, receipts from the robust tourism sector, and sustained inflows of foreign direct investments. For 2019, the BSP sees a BOP surplus of $ billion equivalent to 1 percent of GDP. The current account deficit, on the other hand, has been revised upward to USD 10 billion, equivalent to 2.8 percent of GDP.

BIS Review 35/2006 5 Conclusion The Federal Reserve believes that ensuring strong capital levels and good risk management at U.S. banking organizations is critical to the health of our banking and financial system. Our regulatory and supervisory efforts support this broad objective.

Conclusion In closing, let me reiterate the importance of moving ahead with the administrative and legislative reform agenda that I have laid out this afternoon. The components of this agenda will each be significant contributions to a more effective regulatory system. They will enhance financial stability and increase market discipline in transactions involving large financial firms.

The “monetary analysis” focuses on money and liquidity considerations and the statistics supporting it include, for example, the detailed consolidated balance sheet of the euro area banks, in particular the monetary aggregates and counterparts, the balance sheet of euro area investment funds, securities issues statistics and the financial balance sheets of the nonfinancial sectors.

Deepening means that prudential rules should converge further where undue carve outs remain. Broadening means that the single rulebook should be expanded to other areas that affect the single financial market. Institutional dimension Beyond the regulatory dimension of a capital markets union, there are a number of institutional questions related to consistency across market segments, multi-level governance, actors and geographical scope.

The central issue is not, in fact, whether all monetary policy rates are automatically passed through to customers in full, as it is clear that the cost of funding is impacted by other factors such as the high costs of deposits and the Government guarantee.

It involves among other things, extending loans, some of them as low as fifty dollars, so that people can start their own small businesses and generate income for their families. Microfinance, when done well, has the ability to empower people.

One way of addressing this problem is to strengthen the supervision of the banking sector, particularly with a view to reducing the level of non-performing assets in the books of commercial banks. It is incumbent upon us to ensure that appropriate institutions, technical capacity and legal frameworks exist to support the process.

All in all, the legal framework governing bank resolution is spread all over, making the framework complex, confusing and oftentimes non-transparent. 19. One big issue that needs to be addressed is whether the court-driven procedure as followed in India for bank resolution can be made faster.

Conversely, the regulation BIS Review 17/1998 -5- has contributed to some market innovations that appear to be driven, if not solely, at least primarily by the need to engage in regulatory capital arbitrage. Second, the reality of globalization must be accounted for in designing and implementing our regulatory and supervisory systems.

Certainly, the recent data on consumer prices have been encouragingly consistent with the downward tilt to inflation that the FOMC has been expecting. However, we need to be cautious about extrapolating trends from a couple of months of data. The data themselves are noisy - subject to month-to-month variations that are unrelated to more-persistent developments.

Nagel: We have emphasised several times that we are monitoring the increase in real estate prices very closely. In the past few years, prices in Germany have risen distinctly – especially in urban centres. However, there do not appear to be any price bubbles at present. We therefore see no acute financial stability risk for the moment.

And what about the euro area as a whole, Mr Cœuré? Cœuré: Currently the superfluous liquidity that has been created by the ECB to fight the crisis is coming back to us. Therefore we see no material risks of bubbles and even less of inflation. When the situation improves and liquidity finds it way to the real economy, this could change.

When we look at them from the financial stability standpoint, we think it is important to have a full understanding of the main reasons behind this extraordinarily rapid expansion, and to handle appropriately the risks involved with hedge funds. This handling is operated through the counterparties of the hedge funds, namely banks, which are themselves under the surveillance of the banking authorities.

In the U.S., in view of the lower weight of banks in the overall financial system, the size of the shadow banking, although not much higher than in Europe in absolute terms, is practically equal to the total assets of the banking sector.

These imbalances remain a challenge, largely reflecting a lack of adjustment in a number of Member States. It remains indispensable that the countries concerned bring their monitoring of cost competitiveness indicators, their structural reforms, and their fiscal consolidation efforts more into line with the BIS Review 34/2010 3 principles and rules underlying the functioning of monetary union.

It has turned out, contrary to widely held expectations two years ago, to be quite a robust one overall. Real GDP for the world is estimated by the IMF to have grown by 5 per cent in 2010, well above the medium-term trend of a touch under 4 per cent.

This disrupted traditional media and led a growing segment of the public to get their news from alternative channels and social media. Many had hoped that the democratization of information would make us all better informed. Sadly, too often that’s not the case.

While the internet and social media have vastly broadened access to information, they are also awash with misinformation, echo chambers and conspiracy theories—often pushed by bots and trolls, sometimes for nefarious purposes. Against this backdrop came the pandemic and its devastating global economic impact. Central banks have taken unprecedented monetary policy actions to save livelihoods, support economic recovery and avoid deflation.

I think the probability that a similar situation will occur is much smaller compared with the 1997-98 period. Through these channels, quantitative easing has been firmly supporting economic activity. But, we should never be complacent. We are determined to make further efforts to improve the transmission mechanism so that the effect of quantitative easing will permeate the economy to the fullest extent possible.

As part of such efforts, the Bank recently decided to purchase asset-backed securities (ABSs). The necessary preparations having been completed, we will be ready to purchase the securities in the near future. Policy commitment There are other measures to stabilize financial markets.

Quite often, bubbles are too elusive to identify even when they are crashing. On top of that, when accumulated excesses are being unwound in the aftermath of the bubble bursting, the efficacy of central bank’s easing policy is materially reduced as we are witnessing now. So what should we do?

First and foremost, central banks should be attentive to both the prevention of bubbles and the mitigation of their consequences. I believe this symmetrical approach is important. Central banks should remain vigilant as to whether excesses are lurking in the economy.

In addition to this, although not directly responsible, the ECB naturally attaches great importance to a smooth and well-prepared changeover in every aspect. To this end, the ECB and the national central banks of the euro area have endorsed a number of general principles, concerning, for example, the frontloading and sub-frontloading of the euro banknotes and coins.

Given the devolution of responsibilities for the cash changeover, such general principles are important to ensure a level playing-field and to avoid competitive distortions. Also important is the common schedule for the changeover. This sets specific dates for the various stages of the process, which need to be respected by all concerned.

Ultimately, the Bank’s job is to look at the economy as a whole and judge the outlook for inflation. Today, the view is quite good, even with the shadow cast by household debt. This debt still poses risks to the economy and financial stability, and its sheer size means that its risks will be with us for some time.

Conclusion The central scenario for the Australian economy is a positive one, with growth over the next couple of years at, or above, average, a relatively strong labour market, and inflation consistent with the medium-term target. There are, however, risks around this central scenario that we will need to watch carefully.

This is a strong commitment that the Bank will continue expanding the monetary base until the year-on-year rate of increase in the actual CPI exceeds 2 percent and stays above that level in a stable manner.

On the other hand, a pickup in private consumption has paused due to increased downward pressure stemming from the spread of the Omicron variant since the beginning of the year.

These operations have been accompanied by prompt communication – via press releases or other channels – to reassure the markets that the ECB stood ready to do what was needed to guarantee the orderly functioning of the interbank market and to reduce the volatility of very-short-term rates.

At the same time, the Council has emphasized its determination to ensure that risks to price stability over the medium term do not materialize and to keep inflation expectations consistent with price stability. These events have demonstrated that central banks, and the ECB in particular, are wellequipped to handle these problems.

We are aware of the continuing difficulties for banks due to the stress on sovereign bonds, the tightness of funding markets and scarcity of eligible collateral in some financial segments. We are also aware of the problems of maturity mismatches on balance sheets, the challenges of raising levels of capital and the cyclical risks related to the downturn.

Challenges for Europe’s Economic and Monetary Union Let me now turn to the overall functioning of Europe’s Economic and Monetary Union. Looking back at 2010 and 2011, notable progress has been achieved in reinforcing economic governance – though I recognise that this may not be evident in times of crisis.

The reform would require the biggest cooperative banks to approve their transformation into joint stock companies, an ownership structure that gives them increased access to capital markets. Broader participation by shareholders in general meetings would reduce the risk of power becoming concentrated in the hands of organized minority shareholder groups. There would be a greater incentive to monitor the conduct of management.

The cooperative bank model could still be used by small and medium-sized intermediaries, thereby preserving the cooperative spirit of those local communities to which it is well-suited. For these intermediaries too, the reform aims to strengthen several aspects of governance and to increase the incentives to invest in their capital.

However, even bearing in mind such uncertainties, the baseline scenario is that overseas economies will continue to pick up and Japan’s exports will accordingly increase moderately. Developments in employment and income From the perspective of a sustainable recovery in domestic demand, I would like to talk next about developments in employment and income.

As mentioned earlier, Japan’s economy is expected to recover moderately in a virtuous cycle among production, income, and spending, and will achieve the 2 percent price stability target. To this end, it is critical to have an improvement in income in order to underpin private consumption.

Further, with stronger balance sheets, the organised corporate sector is well-placed to make new investments in emerging areas. As demand recovers, I am sanguine about corporate sector playing a major role in turning the investment cycle that will facilitate absorption of surplus liquidity for productive investment. 12.

What we central banks need to understand is that the behavior of market participants will be influenced by human nature and competitive pressures in the markets. Without trying to paint a complete picture, let me raise a number of issues with respect to the role of central banks which I believe are important in the new financial environment.

And it also impairs the allocative efficiency of the real economy, as credit is allocated away from the smaller and younger firms that are by nature more risky yet create the most net jobs. As 99.7% of firms in the EU are SMEs, this is a crucial issue to be solved.

BIS Review 110/2010 3 Where are we now? So how have things changed in the past four years? What have we learned from our longterm research effort? What have we and other central banks learned from the bitter experience of the crisis? Have recent events dampened or strengthened our taste for reform?

I would like to close my speech by expressing my sincere hope that these dynamic initiatives by the industrial sector, combined with financial institutions' and the local government's support, will lead to further growth and development of the Chubu region. Thank you.

8 Japan's Economy and Monetary Policy Speech at a Meeting with Business Leaders in Nagoya November 14, 2016 Haruhiko Kuroda Governor of the Bank of Japan Chart 1 Developments in Financial Markets Changes in JGB Yield Curve 1.0 Exchange Rates and Stock Prices % 20,000 Depreciation of the yen September 20, 2016 (the day before the decision to introduce QQE with yield curve control) 0.8 yen yen/U.S.dollar 125 Nikkei 225 Stock Average (left scale) Yen/U.S.

22 Regarding the maximum-employment mandate, the new statement now acknowledges that maximum employment is a “broad-based and inclusive goal” and continues to state that the FOMC considers a wide range of indicators to assess the level of maximum employment consistent with this broad-based goal.

However, under our new framework, policy decisions going forward will be based on the FOMC’s estimates of “shortfalls of employment from its maximum level”—not “deviations.” 23 This change conveys our judgment that a low unemployment rate by itself, in the absence of evidence that price inflation is running or is likely to run persistently above mandate-consistent levels or pressing financial stability concerns, will not, under our new framework, be a sufficient trigger for policy action.

In recent years, there have been successive natural disasters in Japan.2 At the end of last year, the government formulated the economic measures for the first time since 2016, with the aim of overcoming natural disasters and downside risks to economic activity and of providing people with a sense of security for the future.

These ratios justify a high degree of public confidence in the safety and stability of the financial system and are also testimony to the prudent risk management of commercial banks in Uganda. The banks in Uganda can take pride in these important achievements and the contribution they have made to the development of the economy since the 1990s.

Businesses with less than 15,000 employees or 2019 revenues of less than $ billion are eligible to apply for Main Street loans. Available loan sizes span from $ to $ million across the facilities and depend on the size and financial health of the borrower.

Instead, banks appear to have hoarded the additional liquidity. Bank lending had been contracting since the late 1990s and continued to do so through to 2006. Research conducted by the Bank of Japan concluded that the ability of quantitative easing to impact on aggregate demand and prices was limited.